Ivory Coast Tongon Gold Mine On Track - Randgold CEO

Construction work at a gold mine at Tongon in the north of Ivory Coast is on schedule, under budget and on track to start production in the final quarter of 2010, Mark Bristow, chief executive of Randgold Resources Ltd. (RRS.LN), told Dow Jones Newswires Sunday.

The deposits at Tongon are estimated at 3.16 million troy ounces and Randgold is looking to expand this resource base further.

"The challenge here is going to be managing the political situation. Our first big mill arrives on Dec. 10 and that is really the thing that drives the whole production process," said Bristow.

Presidential elections in Ivory Coast are scheduled for 29 Nov., 2009, although they have been repeatedly postponed since 2005.

The elections would be a major advance in normalization after the 2002-07 civil war.

The mill is being brought into Ivory Coast's second port, San Pedro, to avoid potential trouble in the main city Abidjan.

The first permit for the site was granted in 1996, but plans were put on hold because of the civil war. Randgold maintained a presence in the country.

At the weekend, Bristow led a government delegation to the Tongon site in the far north of Ivory Coast, near the border with Mali.

The first stage of construction on the site's dam has finished allowing enough water to be collected in the recent main rainy season to provide water for the construction and startup phase.

The dam will eventually supply all the mine's water needs.

"It's the one area that Randgold can stand above anyone else in Africa that in all our mines you can drink the water," Bristow said.

On the other side of the border with Mali, Randgold has been operating the Morila site, a joint-venture with AngloGold Ashanti Ltd. (AU), since 2000. In 2008 it produced 426,000oz.

The other big mine in Mali, with production in 2008 at 258,000oz, is at the Loulo complex.

Bristow said the mine was on a critical path: "It's a sweat but we deliver and we keep delivering."

The mine employs more than 2,000 people and he said there had been a few social issues to deal with over the past quarter.

Randgold's quarterly results published next week will show a material increase in production, he said.

A new discovery in the district at Gonkoto, 20km south of the main mine, is delivering some "blistering results."

This site will be developed alongside another discovery at Massawa in Senegal.

Here a prefeasibility study should be completed this year, with construction starting in 2011.

"We're very committed to the gold market - we think it's a great time to be there. The gold market is very well poised with the noise from China and Russia on an alternate currency, which is very good for gold, because the euro's not big enough to support that."

-By John James; Dow Jones Newswires; [phone]; [e-mail]